Which One of the Following Is an Example of a Long

question 33

Multiple Choice

Which one of the following is an example of a long hedger?

• A) an oil refinery buying crude at spot oil prices
• B) a farmer who grows wheat and sells futures contracts short
• C) a trader who transacts in futures for the sole purpose of making profits
• D) a cereal producer who purchases wheat futures contracts

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Definitions:

Investments

The process of assigning funds or other resources in the hopes of earning profits or returns.

Mexican Pesos

The official currency of Mexico, used in financial transactions within the country.

Exchange Rate

The worth of one currency in relation to another, establishing how much of one currency can be exchanged for another.

Lawn Mower

A lawn mower is a machine utilizing one or more revolving blades to cut a grass surface to an even height, powered manually or by an engine.